On the way home from work, busy commuters in South Korea are able to save time doing their supermarket shopping thanks to virtual stores at bus stops and subway stations where people can pick up juice, fruit, snacks and more from their smartphones.
Consumers can do grocery shopping in virtual stores at bus stops or subway stations.
Tesco Home plus launched its Korean internet shopping service in 2002, offering 35,000 items and served by 60 stores. According to the company, e-commerce accounts for 3% of Home plus business. Grocery shopping makes up 85% of all e-commerce transaction, while non-food products account for the remaining 15%.
Of South Korea's 50 million people, more than 60% use smartphones. Tesco Home plus adjusted its online shopping platform and came up with an application that taps into the great potential of mobile phone users.
Tesco Home plus' head of online businesses Sean Hur noted that mobile applications and online shopping share the same basis.
Once customers order the products, the store checks the order list, then packages the products and delivers on the same day, 10 times a day.
The company launched the mobile application in April last year and so far there are more than 1.4 million downloads, with 55,000 customer visits daily. It plans to have reached two million downloads by the end of this year. The top five most popular uses are for shopping, coupons, clubcards, leaflets and store information.
The Home plus mobile app has become the No.1 mobile shopping app in South Korea. Mobile shopping sales make up 9.4% of total e-commerce sales.
The outdoor media displays look like those in stores, and consumers can scan QR codes with their smartphones to order products.
Hur pointed out that the Home plus app was easy to sign up to and featured personalised information. Customers have a personal ID or clubcard number as their login, they can check their personal information and clubcard points.
In addition, specialised offers and integrated digital coupons, easy product search and access to an online mall by scanning barcodes have helped boost the business.
Home plus' first virtual store opened at Seolleung station in August last year. It was a combination of concept advertising and new technology. In 2008, the company only used a billboard to advertise the products but as technology has developed, with smartphones and QR codes ubiquitous, Home plus has created virtual stores in subway stations by designing the technology for everyday lives. The display, the main feature in the whole strategy, is designed to look exactly like an actual store, from layout to merchandise.
Users just scan QR codes downloading the Home plus mobile application, then order the products that show on the media displays in subway stations and bus stops, then they can put products in their online carts. When the online purchase is processed, the goods are delivered to their homes.
The average purchase in virtual stores is 90,000 won (2,500 baht), which is more than an average offline purchase. Currently, there is one virtual store at the Seolleung subway station, and 10 more at bus stops. Bestselling items in virtual stores are instant coffee, bottled drinking water and juice.
"The virtual stores helped build Home plus' brand image so that we are not just a retailer, but an advanced high tech retailer, and the virtual store can be a gateway to online shopping," Hur said. The success of virtual stores in South Korea has lead Tesco to expand the concept to the UK by implementing the virtual store at London's Gatwick airport. In Thailand, Tesco Lotus is going to introduce an online shopping service by the fourth quarter of this year giving customers the opportunity to order both fresh and dried groceries through an easy-to-use internet interface and have them delivered to their homes.
About the author
- Writer: Sasiwimon Boonruang
Position: Life Writer